BRI Progress in Mongolia - UN ESCAP BRI Cooperation Priorities of BRI in Mongolia Cooperation

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  • BRI Progress in Mongolia

    Enkh-Amgalan Byambajav, National Consultant of Mongolia, UNDESA

    Workshop on “Assessing the Potential Impact of the Belt and Road

    Initiative on Sustainable Development Goals in Asian Economies”

    Bangkok, Thailand

    25-26 September 2019

  • CONTENT

    • Country profile: Mongolia

    • BRI in Mongolia

    • Conclusion

  • Country profile: Mongolia

    Population 3,238,479 (2019)

    Capital Ulaanbaatar 1,444,700 (2019)

    Area (km2) 1,561,100 (603.863 sq.mi)

    Human Development Index 0.741 (92th) (2017)

    GDP 13 billion USD (2018)

    GDP per capita 4009 USD (2018)

    Landlocked between China and Russia

  • – Mongolia is a lower-middle-income country with a GDP of 13 billion USD (2018)

    – In 2018, annual economic growth rate was 7.2 percent

    – Average GDP growth rate between 1990-1999 is -0.4%

    – Average GDP growth rate between 2000-2009 is 5.9%

    – Average GDP growth rate between 2010-2018 is 7.9%

    – The growth rate changes following the commodity prices in the world economy

    because of its dependency from the mining sector.

    – GDP per capita has increased 4.2 times between 2000-2009 from 450$ to 1882$

    – GDP per capita has increased 1.6 times between 2010-2018 from 2488$ to 4009$

  • Foreign trade in 2018

    – Mongolia exports 7.0 billion USD and imports 5.9 billion USD with the balance of

    1.1 billion USD.

    – Mongolia exported goods to 74 countries and 96% of total exports went to China.

    – The main types of exports come from mining and minerals, and agricultural

    industry.

    – Furthermore, 78.1% of the total imports are from Russia and China.

    – Main import goods are food products, clothing, machinery, vehicles and fuel.

    – Mongolia imports approximately 99% of its petroleum needs from Russia.

  • The Belt and Road Initiative: Six Economic Corridors

    – Source: New Delhi Times

  • Background of BRI in Mongolia

    September, 2014 Dushanbe

    23 June, 2016 Tashkent

    14-15 May, 2017 Beijing

    9 July, 2015 Ufa

    Source: Author ’s compiling from various sources

    The first trilateral

    meeting of Mongolian

    President Ts.Elbegdorj,

    Chinese President Xi

    Jinping and Russian

    President Vladimir Putin

    Focus on economic

    cooperation

    The second trilateral

    meeting of Mongolian

    President Ts.Elbegdorj,

    Chinese President Xi

    Jinping and Russian

    President Vladimir Putin

    Meeting of Prime

    minister J.Erdenebat,

    Chinese President Xi

    Jinping and Prime

    minister Li Keqiang

    Signed MOU on Formulating

    Guidelines for Constructing

    China-Mongolia-Russia

    Economic Corridor /32 projects/

    Figure 1: Major Political Events related to BRI in Mongolia

    Signed the “Project Outline

    for Constructing the China-

    Mongolia-Russia

    Economic Corridor”

    The third trilateral

    meeting of Mongolian

    President Ts.Elbegdorj,

    Chinese President Xi

    Jinping and Russian

    President Vladimir Putin

    Attended first BRI forum,

    Signed bilateral economic

    cooperation documents

  • Background of BRI in Mongolia (continue)

    13 September, 2017 Ulaanbaatar

    24-28 April, 2019 Beijing

    14 June, 2019 Bishkek

    9-10 June, 2018 Qingdao

    Source: Author ’s compiling from various sources

    Investment Research

    Center established

    under Ministry of Foreign

    Affairs

    The center is responsible for conducting research on technology, economic estimation, research on coordinating regulations of the three countries and so on.

    The fourth trilateral

    meeting of Mongolian

    President Kh.Battulga,

    Chinese President Xi

    Jinping and Russian

    President Vladimir Putin

    Discussed to strengthening

    and enrichment of Mongolia-

    China-Russia comprehensive

    strategic partnership

    Figure 1: Major Political Events related to BRI in Mongolia

    Meeting of Mongolian

    President Kh.Battulga

    Chinese President Xi

    Jinping

    Proposed to accelerate the

    construction of a network of

    cross-border highways, facilitate

    customs clearance, strengthen

    energy cooperation, and discuss

    the construction of regional

    power grids.

    Attended second BRI forum,

    Signed of bilateral

    cooperation documents

    including a plan to align the

    BRI with the Development

    Road program.

    The fifth trilateral

    meeting of Mongolian

    President Kh.Battulga,

    Chinese President Xi

    Jinping and Russian

    President Vladimir Putin

  • Program of Mongolia-Russia-China Economic Corridor

    – Projects under trilateral economic corridor:

    • Transportation and infrastructure 13

    • Railway 7

    • Logistics 1

    • Road 4

    • Telecommunication 1

    • Industrial sector 2

    • Development of border- crossing points 1

    • Energy sector 1

    • Facilitation of trade and inspection procedures 4

    • Environment and ecology 3

    • Education, science and technology cooperation 3

    • Humanitarian 3

    • Agriculture 1

    • Medical science 1

    – Total 32

  • Railway transit corridor

    – Source: Ministry of Foreign Affairs

  • Road transit corridor

    – Source: Ministry of Foreign Affairs

  • – Source: Kumagai Satoru, Gokan Toshitaka, Keola Souknilanh “Economic impacts of economic corridors in Mongolia : an application of IDE-GSM” IDE-JETRO 2018

    Table 1: Economic Impact of Corridor (2030, against baseline, million USD)

    Simulated by IDE-GSM model

    Agriculture Automotive E&E Textile Food Proc. Oth. Mfg. Services Mining Total

    Mongolia -0.7 0 0.2 0.5 6 -0.1 8.8 1.7 16.5

    China 0.1 18.1 21.1 15.8 51.1 56.5 1198.6 -2.1 1359.2

    Russia 0 0.9 15.9 0.5 5.7 -1.4 8.5 3.5 33.6

    Central Asia Regional Economic Cooperation (CAREC) Economic Corridor 4a

    Central Asia Regional Economic Cooperation (CAREC) Economic Corridor 4b

    Central Asia Regional Economic Cooperation (CAREC) Economic Corridor 4c

    Agriculture Automotive E&E Textile Food Proc. Oth. Mfg. Services Mining Total

    Mongolia -1.2 0.1 0.2 13.9 43.7 19.2 125 79.7 280.7

    China -13.7 1307 -122.4 1416.4 839.5 -893.2 -83.9 412.3 2862

    Russia -0.2 45.7 16.3 12.1 172.1 116 -4.6 96.9 454.4

    Agriculture Automotive E&E Textile Food Proc. Oth. Mfg. Services Mining Total

    Mongolia -0.3 0 0 1.8 9.6 1.2 25.7 9.9 47.8

    China 0.1 2.3 9 19.3 40 61.6 385 14.7 532

    Russia 0 0 1.1 0 -0.2 1.1 5.5 1.6 9.1

  • – Source: Bank of Mongolia

    4.9

    20.7

    23.6

    0.0

    5.0

    10.0

    15.0

    20.0

    25.0

    30.0

    35.0

    0.0

    5.0

    10.0

    15.0

    20.0

    25.0

    China Total investment China to total ratio

    Foreign Direct Investment Position of Mongolia

    (bln.usd percent)

    3.24

    29.5

    11.0

    0.0

    2.0

    4.0

    6.0

    8.0

    10.0

    12.0

    14.0

    -

    5.00

    10.00

    15.00

    20.00

    25.00

    30.00

    35.00

    China total debt Total debt China total debt ratio

    Gross External Debt of Mongolia

    (bln.usd, percent)

  • Chinese Foreign Direct Investment to

    Mongolia by economic sector

    – Source: Ministry of Finance

    FDI inward flow from China

    reached 4.9 billion USD,

    which was 23.6% of total

    investment in 2018. (close

    to Lao PDR, 23%).

  • Cooperation Priorities of BRI in Mongolia

    Cooperation Priorities Activities

    Policy coordination China and Mongolia signed a cooperation plan to promote the alignment of the China-

    proposed Belt and Road initiative (BRI) with Development Road of Mongolia.

    Facilities Connectivity

    Three priority projects: 1) Central railway corridor,

    2) Central Highway corridor

    3) Energy sector (electricity transmission line)

    Unimpeded Trade

    Logistic 1, Telecommunication 1, Development of border- crossing points 1,

    Facilitation of trade and inspection procedures-4 projects will be implemented to facilitate

    trade

    Financial Integration Asian Infrastructure Investment Bank, BRICS new development bank, SCO Interbank

    Consortium, Silk road fund, Export Import bank of China

    People to People Bond

    - There are 6,268 students studying in China, of which 358 are through the agreement

    between the Governments in 2018.

    - The number of Chinese tourists increased by 8.5 and 15.1 percent respectively in 2017

    and 2018, while tourists to China increased by 2.7 and 43.2 percent.

  • National Working Group to Implement

    Mongolia-Russia-China Economic corridor

    National Working group headed by Vice Minister for Ministry of Foreign Affairs was

    established